By Stefano Virgilli — In times of crisis the luxury industry is not immune to negative economic impact — but many analysts see luxury goods as a stable bet in a turbulent economy. The jewellery industry is especially resilient because its products are more accessible in times of plenty, yet when economic indicators are down, the precious metals and gemstones used in jewellery also tend to maintain their value or even appreciate.
Jewellers constantly updating the designs and styles of their offerings, as well as reviewing the intrinsic value of the materials used to produce their stunning jewels.
Where does the value captured in your jewellery come from? Most think of precious metals such as gold and platinum. These commodities can be traded independently, but when used in jewellery have both value and beauty. More fascinating and lucrative however are the gemstones! There are over 4,000 mineral types with many new species being discovered each year — yet only a tiny fraction of these are sufficiently durable, beautiful and rare enough to be called gems!
Tanja Sadow, Dean and Founder of the Jewellery Design and Management International School has been involved in every facet of the jewellery industry for over 3 decades and has seen all sorts of market fluctuations. Sadow shares that throughout time, good jewellery designers have always managed match demand with the precious resources, even in difficult times.
While tastes or buying power change, the desire for stunning wearable statements of beauty does not.
Jewellery designers and manufacturers continue to create beautiful pieces cleverly using new technologies to produce lighter weight items without compromising size or effect. Gemstones too can be a source of flexibility: A more popular and costly gem can be substituted for one which is just as beautiful but lower in price. Sometimes, this has the added effect of raising awareness about less well-known gem varieties and creating unexpected investment opportunities.
According to Jewellery News Asia, the “rock-star” of 2017 could be tourmaline. A beautiful gem which comes in every colour of the rainbow, first traded centuries ago by the Dutch East India Company from Sri Lanka to Europe. One of the most rare and beautiful varieties of tourmaline was only recently discovered in Brazil, in the state of Paraiba, by Heitor Dimas Barbosa in the ‘80s.
Paraiba Tourmalines have a very special neon blue and blue-green colour. They are the only variety of tourmaline to be coloured by copper. Demand for these unique gems has grown exponentially since their discovery, and an investment in Paraiba Tourmaline in the nineties would have yielded 25 times return or a compound annual growth rate of over 8 per cent if sold at today’s prices. Despite this amazing increase in value, experts say demand for the gem remains very strong and Tourmaline is likely to contribute significantly to jewellery industry growth in 2017.
The Paraiba Tourmaline variety is so rare, that in comparison to diamonds, there is only 1 Paraiba extracted for every 10 thousand diamonds.
This is because the mines where it was first discovered were very small and only in the one location in Brazil. It is also difficult gem to find in larger sizes, which makes it even more rare from market perspective.
In Africa, both in Mozambique and Nigeria new tourmaline deposits were recently found within copper-rich mountains and those with the same chemical composition and crystal structure have now been accepted as Paraiba after much debate — increasing supply to meet the ever-growing demand for this extraordinary gem.
According to gemstone dealers in Asia, the price for a 3 to 5 carat Paraiba, given its rarity, could reach and exceed $10,000 per carat. According to the International Gem Society, the prices for the finer quality Paraiba tourmaline is exceed $16,000 per carat.
Next time you examine your investment portfolio — ask yourself how many of your investments have performed well and provided you with a stunning, wearable statement? While not the traditional investor’s choice, gems have made fortunes and attracted the fortunes of others for millennia!
Dr George Kunz was one of the first well-known gemologists to truly appreciate the rarity and beauty of Tourmaline and he was hired at Tiffany & Co when he made a sale of a beautiful large green Tourmaline to Charles Louis Tiffany in the 1876. Famous celebrities own Tourmalines in their many beautiful colours including the extraordinary Paraiba variety.
It was even said that the Empress Dowager Cixi, who ruled over China until 1908, was particularly fond of tourmaline. With past and present fervour, be sure to keep your eye on the jewellery industry in the coming year, an island of beauty and opportunity in the uncertain waters caused by global changes!